Aerosol-cloud interactions, also known as aerosol indirect effect (AIE), substantially impact rainfall frequency and intensity. Here, we analyze NEX-GDDP, a multimodel ensemble of high-resolution (0.25°) historical simulations and future projections statistically downscaled from 21 CMIP5 models, to quantify the importance of AIE on extreme climate indices, specifically consecutive dry days (CDD), consecutive wet days (CWD), and simple daily intensity index (SDII). The 21 NEX-GDDP CMIP5 models are classified into models with reliable (REM) and unreliable (UREM) monsoon climate simulated over India based on their simulations of the climate indices. The REM group is further decomposed based on whether the models represent only the direct (REM_ADE) or the direct and indirect (REM_ALL) aerosol effects. Compared to REM_ADE, including all aerosol effects significantly improves the model skills in simulating the observed historical trends of all three climate indices over India. Specifically, AIE enhances dry days and reduces wet days in India in the historical period, consistent with the observed changes. However, by the middle and end of the 21st century, there is a relative decrease in dry days and an increase in wet days and precipitation intensity. Moreover, the REM_ALL simulated future CWD and CDD changes are mostly opposite to those in REM_ADE, indicating the substantial role of AIE in the future projection of dry and wet climates. These findings underscore the crucial role of AIE in future projections of the Indian hydroclimate and motivate efforts to accurately represent AIE in climate models.